HOW TO START COOKING GAS (LPG) BUSINESS IN NIGERIA
The use of cooking gas by Nigerians has increased from 110,000MT in 2013 to 400,000MT in 2016. This implies that there is an increasing demand for cooking gas in Nigeria and investing in cooking gas business is very promising.
It is not a disputable fact that Nigeria is one of the oil producing countries in the world and a greater percentage of her revenue from oil. Did you know that gas is a by-product of petroleum and until recently was greatly underestimated? According to statistics just about 5% of consumption potential of LPG was used.
However this is no more obtainable. A lot of people are now aware of the usefulness and convenience of making use of cooking gas. People would have preferred using electricity but due to the lack of steady power supply most persons don’t make use of electricity for cooking. Kerosene stoves were the other option but the problems associated with this one is that it is expensive, stressful and creates soot which is difficult to clean. This now leaves the use of cooking gas standing. Most people prefer using cooking gas because it is cheaper, faster, easier and more convenient.
What all this implies is that there is a high demand and ready market for cooking gas in the country which makes it a lucrative business to engage in. Notwithstanding the current recession, this demand remains because feeding is a basic necessity and people still need to cook their food.
HOW TO START COOKING GAS BUSINESS IN NIGERIA
There are a few things that you have to take cognizance of before you start the cooking gas business. They are as follows:
Get a Cooking Gas LPG Business Intelligence Report
For your business to be a success, you need to have a substantial knowledge about it. Your knowledge base allows you to make concrete plans and execute them properly. For instance you need to be aware of the number of gas plants in the area you are targeting , their average turn-around time,etc so that you’ll make plans and working strategies to advertise yourself. You’ll equally need to the dos and don’ts of the business and a good way to learn about this is from the experiences of others who got into the business before you.
Land: The issue of land when it concerns a cooking gas business is not a trivial matter as a result of the fact that there are environmental and health implications of cooking gas. Hence, in accordance with DPR (Department of Petroleum Resources) directive, a gas plant must be located at least 15meters from any building that has flammable materials, such as residential buildings, filling shed etc. As a matter of fact before you can get your licence and before your application can be approved, the DPR comes for inspection and if the requirements are fulfilled then the licence will be issued.
Capital and Labour: Without a doubt, every business needs capital and labour, Cooking gas business inclusive. In fact cooking gas business is capital intensive as you’ll need to purchase necessary equipments and machines. The DPR would look out for this as it shows how ready you are for business. Examples of the necessary equipments and machines include; the testing pool, valve screwing, electronic carousel, mechanic carousel, electronic scale, mechanic scale, etc.
You would equally need to employ a number of staff to help you in running the business.
Licensing and Permits: The matter of licensing and issuing of permits is handled by the Department of Petroleum Resources ( DPR) and there are three stages. They are as follows;
Site Suitability Report: This is the first stage. The DPR will visit the site to ascertain if it is okay to be used as a cooking gas filling plant
Required Documents: Documents that would be required before licence can be issued include;
1. The Certificate of Ownership (C/O) of the property or any proof of ownership
2. An application letter for DPR suitability inspection. This has to be addressed to the comptroller of DPR in the particular state you want to set-up the plant in.
3. A survey plan of the Land
4.The certificate of incorporation and Memorandum of Association of the company.
5.Tax Clearance certificate
6. Location Map of the Land which has to cover 1km adjoining the property to be used
Approval to construct: When the DPR has given the go ahead order to set up the plant, the next thing to do is to prepare and submit the following documents;
Town Planning Permit
Fire Planning Approval
State Land and Physical Planning Permit
Layout drawing of the proposed plant
Carry Out an Environmental Impact Analysis
Approval to operate: After the first two stages, the last stage is to certify the installation and Materials used to build the establishment. They documents required for this are;
Pressure Test Report
Fire Response Report
SON certification for the pressured vessels
Insurance: Although Insurance is not compulsory, it is highly recommended, because you are dealing with flammables and there could be unforeseen occurrences. Despite the fact that precautions and safety measures will be in place, one can never be too careful so to be on the safe side it is best to be insured.
Marketing: You have to advertise your business, and make people aware of it. This greatly improves customer base and profit margin. If people do not know about your business they will not patronise you so you have to take advertising and creating awareness very seriously and employ strategies to make it work. This is very crucial and goes a long way in determining the success of your business so go the extra mile for it. If you can afford it employ staff specifically for this purpose or map out plans to see that people are made aware of your business so that you can get patronised.
More so, it is best to get training from someone already in the business. There are things about the business that you would not know as a freshman so you need someone who has experienced these firsthand to show you the ropes and teach you how to avoid and scale through the loopholes.
No doubt this article has shown you a lot as regards the establishment of a cooking gas business. Be sure to apply all you’ve read for the success of your business.
How To Start Cooking Gas (LPG) Business In Nigeria